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APPRAISERS,  SPIES  AND  INFORMERS. 

STATEMENT 

OF 

Mr.  THOMAS  BARBOUR, 

President  of  the  Paterson  Board  of  Trade, 

AND  OF  THE  FIRM  OF 

Barbour  Broth^ei^b^ 


REPRINTED    BY    ORDER    OP  SPECIAL  COMMITTEE 'ON    REVENUE 

REFORM,  OF  THE  NEW-YORK  CHAMBER  OF  COMMERCE, 

FROM  THE  TRIBUNE  OF  MARCH  23,  1874. 


PKES8    OF    THE    CHAMBER    OF    COMMERCE. 

1874 


APPEAJSEES,  SPIES  AND  INFOEMEES. 


STATEMENT 

OP 

Mr,  THOMAS  BARBOUR, 

President  of  the  Paterson  Board  of  Trade, 

AND  OF  THE  FIKM  OF  .*     „   .     .   , 

Barbour  BRdTil:^^^^;;:;;; 

01  i^w-foyfe. 


EEPEINTED    BY   ORDER   OF  SPECIAL  COMMITTEE    ON    REVENUE 

REFORM,  OF  THE  NEW-YORK  CHAMBER  OF  COMMERCE, 

FROM  THE  TRIBUNE  OF  MARCH  23,  1874. 


PKBS8    OP    THE    CHAMBER    OP    COMMERCE, 
1874 


^<r6  7sLo 


•1  •  • 


'  .1  J*  I  ••  •  •••    


jrOHN     W.     AMBRMAK,      PRINTKB, 
No.  47  Cedar  Street,  N.  Y. 


CORRESPONDENCE, 


Chamber  of  Commerce  of  the  State  of  New- York, 
New- York,  March  2Uh^  1874. 

Messrs.  Barbour  Brothers, 
Gentlemen : 
Our  attention  has  been  drawn  to  the  statement  of  the  difficulties 
of  your  house  with  the  special  agent  of  the  Tre^isury,  and  the  Iqng, , , 
series  of  annoyances  and  injustice  to  which  you  wefe'^ubj^cted.' ,'*  f ' 

Is  the  statement  correct  in  all  its  details,  p;nd  icay  wje^;  t^scati^as^a  >  , 
fair  illustration  of  the  danger  of  the  moiety  systenf?"  Wscf,'\v«'wiii  ;/' 
print. 

Respectfully  yours, 

(Signed,)         Jackson  S.  Schultz, 
Chairman  Committee  on  Mevenue  Reform. 


Barbour  Brothers,  134  Church-street, 
New- York,  3farch  2Uh,  1874. 

Jackson  S.  Schultz,  Esq., 

Chairman  Committee  of  Revenue  Reform^ 

Chamber  of  Commerce^  Nexo-  York  :■ 
Dear  Sir : 

We  would  not  permit  any  statement  to  go  before  the  public  in- 
relation  to  our  house  that  we  cannot  verify  to  the  fullest  extent.. 
We  trust  the  history  of  our  troubles  and  losses  as  reported  may  be 
the  means  of  aiding  those  who  are  making  efforts  towards  obtaining 
a  remedy,  and  you  are  at  perfect  liberty  to  make  what  use  you 
please  of  the  statement  to  that  end. 

Yours  respectfully,. 

(Signed,)  Barbour  Brothers. 


678978 


MR.  THOMAS  BAIiBOUR'S  STATEMENT 


AN  IMPORTANT  BUSINESS  BROKEN  UP. 

CUSTOM-HOUSE    SPIES   AND  APPBAISEKS   DKIVE  A  LARGE  MANUFACTUB- 

ING     HOUSE     OUT     OF   BUSINESS ONE     OF   COL.    FBANK   E.    HOWE's 

BAIDS — NO   MONEY    SECUBED,   BUT   THE   BUSINESS   DESTBOYED. 

;  ,'A  rema,v]^a;b?.,e;*Uistance  of  the  evil  effects  of  the  present  system  of 
informers  and  moieties  iipon  American  industries  is  shown  by  the 
;c^s',e  of  the  Barl^Q'ar,  Flax  Spinning  Company,  whose  works  are  at 
"Paterson,  N.  J.  The  jDarent  establishment  of  this  Company,  that  of 
William  Baeboue  &  Sons,  is  in  Lisburn,  Ireland,  where  their  mills 
'have  been  running  since  1785.  These  now  employ  2,000  workmen, 
whose  houses  form  a  village  in  the  neighborhood.  Thomas  Bae- 
boue, a  member  of  the  firm  of  William  Baeboue  &  Sons  in  Ire- 
land, the  President  of  the  Barbour  Flax  Spinning  Company,  and  the 
senior  member  of  the  firm  of  Baeboue  Beos.  at  No.  134  Church- 
street  in  this  city,  has  been  established  in  business  here  over  20 
years,  and  in  that  time  his  house  has  paid  the  Government  over 
$2,000,000  in  duties,  while  it  has  always  occupied  a  high  position, 
and  never  had  the  least  dispute  or  difficulty  with  customs  officials 
till  1872,  when,  as  the  firm  assert,  Feank  E.  Howe's  special  revenue 
bureau  made  a  series  of  determined  efforts  to  extort  money  from 
the  firm. 

In  1864,  when  the  duty  was  taken  from  flax  machinery,  the  house 
of  William  Baeboue  &  Sons  determined  to  establish  branch 
works  in  Paterson.  Extensive  jDurchases  of  factories,  tenement- 
houses  and  water  privileges  were  made.  Flax  machinery  and 
skilled  labor  were  imported  at  great  expense.  Large  numbers  of 
operatives  were  brought  from  Ireland,  houses  were  provided  for 
them,  steady  work  was  furnished  them,  and  the  prosperity  of  the 
city  of  Paterson  was  much  increased  by  this  enterprise.     The  manu- 


facture  of  shoe  threads  and  of  linen  threads  which  are  largely  used 
in  various  leather  manufactures,  was  begun  on  a  liberal  scale  in 
mills  called  the  Passaic  Flax  Thread  Works,  driven  by  water-power 
and  employing  450  hands.  An  extensive  department  was  estab- 
lished for  the  spooling  of  linen  threads  imported  in  the  bundle,  as 
cotton  for  spooling  is  so  extensively  imported  to  this  country.  A 
manufactory  known  as  the  Arkwright  Mills,  driven  by  steam  power, 
was  also  started  by  the  Barbours  for  the  manufacture  of  flax 
twines  and  the  coarser  grades  of  goods  for  which  American  grown 
flax  is  suitable.  Yarns  to  supply  this  mill  were  imported  from  va- 
rious manufacturers  in  Dundee,  Leeds  and  elsewhere,  and  from  the 
parent  house  in  Ireland.  The  business  steadily  increased  from  1864 
to  1872,  the  time  of  the  customs  troubles  of  the  house,  and  the  ex- 
tension of  the  business  by  putting  up  a  large  new  mill  was  begun. 
This  would  have  given  remunerative  employment  to  many  hundred 
operatives,  and  would  have  developed  largely  a  new  branch  of  in- 
dustry in  this  country.  The  foundations  of  the  new  mill  were  laid, 
and  additional  machinery  was  ordered  from  Ireland,  but  the  revenue 
oppression  of  1872  checked  the  enterprise.  The  following  statement 
of  the  case  is  given  by  Thomas  Barbour,  who  is  President  of  the 
Paterson  Board  of  Trade,  and  one  of  the  largest  tax-payers  in  Pat- 
erson :  ^ 

The  first  intimation  we  had  of  any  trouble  came  from  our  cus- 
tomers. We  afterward  learned  that  the  special  agent  got  his  infor- 
mation from  a  rival  manufacturer,  who  had  exerted  himself  to  stir 
up  the  revenue  informers  against  us,  and  had  made  false  statements 
to  them.  I  found  afterward  this  man  in  close  conference  with  W. 
V.  Alexander,  who,  under  Col.  Frank  E.  Howe,  had  cliarge  of 
the  case  against  us.  In  order  to  hurt  our  trade  this  manufacturer 
circulated  reports  of  impending  troubles  with  the  authorities  among 
our  patrons,  and  took  pains  to  see  that  those  reports  should  be 
proved  correct  by  the  issue.  A  letter  written  by  one  of  the  largest 
houses  in  Chicago  to  their  buyer  in  New- York  in  the  early  part  of 
March,  1872,  ran  thus  : 

"  Outside  parties  inform  us  that  Barbour  Brothers  have  had 
difliculty  with  the  Custom-House  and  cannot  deliver  thread;  if  so, 
we  must  look  elsewhere.  If  they  cannot  fill  our  orders  this  week, 
you  will  send  us  a  line  of  the,"  etc. 

The  steamship  Italy,  in  port  three  days  after  the  date  of  this  let- 
ter, brought  us  a  shipment  of  goods  which  the  authorities  did  not 


deliver  as  usual  on  the  payment  of  duties,  and  they  afterward  re- 
called goods  previously  received  by  the  Abyssinia,  on  which  duties 
had  been  paid  Feb.  13.  Our  shipments  consisted  of  flax,  which 
paid  a  specific  duty ;  without  our  regular  supplies  of  this  flax  it 
was  impossible  to  keep  our  machinery  in  motion.  The  supplies  for 
(Gur  Arkwright  Mills  consisted  of  linen  yarns,  which  paid,  for  the 
most  part,  a  specific  duty.  Neither  the  yarns  nor  the  flax  were 
affected  in  any  way  by  any  assumed  charges  of  undervaluation. 
Our  shipments  of  machinery  were  also  kept  back,  together  wath 
our  dye-stuffs,  bleaching-stuffs,  and  supplies  of  foreign  paper  for 
wrapping. 

I  ascertained  that  the  charges  on  which  these  detentions  were 
based  came  from  a  department  afterward  known  to  me  as  the 
Special  Revenue  Detective  Bureau.  There  I  was  told  that  informa- 
tion had  been  lodged  which  accused  us  of  irregularities.  The  par- 
ticulars of  these  allesjed  irreojularities  I  could  never  find  out  from 
any  one,  although  I  was  busy  up<m  the  matter  more  than  six 
months,  and  had  a  great  number  of  interviews  with  a  great  many 
officials.  As  the  delays  and  embarrassments  devised  by  the  officials 
absolutely  prostrated  my  business  for  many  months,  I  had  nothing 
else  to  do  but  to  try  to  clear  up  the  matter  and  get  it  settled.  Our 
troubles  lasted  fourteen  months  in  all,  and  in  that  time  I  must  have 
had  several  hundred  conversations  with  various  officials.  Some  of 
those  men  were  often  hard  to  find,  particularly  Frank  E.  Howe. 

My  first  interview  was  with  a  person  who  styled  himself  Col.  W. 
V.  Alexander,  a  remarkably  bland,  insinuating  and  dignified  indi- 
vidual, who  asked  me  to  be  seated  and  to  proceed  to  tell  my  story ; 
at  the  same  time  a  small-sized  cat-like  young  man  glided  into  the 
room  and  placed  himself  in  a  corner  behind  me,  where  he  -could 
note  down  every  syllable  that  might  inadvertently  fall  from  my  lips. 

A  marked  instance  of  the  unfair  and  oppressive  treatment  to 
which  we  were  subjected,  was  the  unreasonable  advance  made  upon 
the  valuation  of  our  finished  goods  ready  for  market,  which  was 
beyond  what  was  well  known  to  be  their  actual  value,  or  the  value 
of  similar  goods  from  other  manufacturers  at  that  time  ;  their  valua- 
tion had  been  already  put  at  a  higher  rate  than  those  set  by  large 
competitors  of  ours.  We  protested,  and  a  re-appraisement  was 
made  before  Judge  IJogeboom,  General  Appraiser,  George  Chap- 
man (firm  Chapman,  Smith  &  Britton)  acting  as  merchants'  ap- 
praiser. After  sji  very  long  and  careful  investigation,  in  which  every 
number  of  our  thread  was  analyzed,  measured  and  weighed,  and  in 
which  every  detail  as  to  price  was  gone  into  with  the  utmost  dili- 


gence,  our  invoices  were  sustained  in  every  particular.  Not  a  single 
instance  of  undervaluation  or  irregularity  was  discovered.  Delivery 
of  the  detained  goods  was  ordered,  and  on  May  21,  1872,  the  last 
package  of  goods  was  received  by  us. 

With  the  advice  of  Deputy  Collector  Lydecker,  we  entered  a 
large  number  of  invoices,  which  had  accumulated  during  the  time 
when  these  proceedings  were  in  progress,  first  asking  him  if  our 
troubles  might  be  considered  to  be  over.  The  following  letter  was 
addressed  to  him,  and  a  favorable  reply  was  received  : 

New- York,  May  15,  1872. 
John  R.  Lydecker,  Esq., 

Deputy  Collector,  Port  of  New-  York : 

Dear  Sir, — We  have  indirectly  heard  that  it  was  the  intention 
of  the  appraisers  to  put  up  our  invoices  now  iii  port,  but  not  yet 
entered,  disregarding  the  recent  decision  in  our  favor.  Now  we 
would  respectfully  ask  you  to  instruct  us  what  to  do  in  this  matter; 
the  greatest  injury  arises  from  our  works  being  partially  stopped, 
and  to  avoid  this  we  want  to  get  our  goods  through  without  any 
unusual  detention.  Can  we  ask  the  Collector  to  allow  us  to  add 
on  the  advance  which  these  highly  intelligent  appraisers  conceive 
should  be  the  jDrice,  contrary  to  all  business  usage  and  custom,  and 
let  us  "  pay  under  protest "  and  then  seek  to  recover  the  difference 
in  due  course  ?  We  are  advised  by  a  number  of  importers  to  do 
this,  and  from  the  polite  and  prompt  manner  in  which  you  extended 
to  us  all  the  information  you  could  in  our  recent  case,  we  trust  you 
will  give  us  the  benefit  of  your  advice  now  about  goods  not  now 
entered.  Rather  than  submit  to  the  annoyances  and  delays  to 
which  we  have  been  subjected,  we  would  export  the  goods  and 
abandon  the  portion  of  our  business  to  which  these  goods  are 
adapted.  Our  workers  have  been  idle  over  two  months,  and  our 
trade  has  left  us,  finding  out  our  inability  to  supply  the  goods. 

We  remain  yours,  respectfully, 

Barbour  Brothers. 

The  bulk  of  our  importations  for  the  Spring  trade  was  comprised 
in  the  invoices  then  entered.  To  our  great  astonishment  we  were 
treated  in  the  same  way  as  before.  We  had  supposed  the  matter 
settled  by  the  result  of  the  long  and  thorough  investigation  just 
concluded,  but  the  invoices  entered  were  immediately  advanced, 
although  no  new  question  entered  into  the  case  of  these  goods,  and 
although  they  were  precisely  similar  in  numbers  and  qualities,  and 


in  all  the  various  grades  precisely  identical  with  those  on  which 
judgment  had  been  passed  with  so  much  care.  The  invoices  en- 
tered consisted  of  flax,  of  yarns,  of  threads  ready  for  market,  and 
of  threads  in  the  bundle,  ready  for  spooling.  They  were  advanced 
without  reference  to  their  contents.  Thus  flax  was  advanced  ten  per 
cent,  and  detained  for  undervaluation,  altho-ugh  it  paid  a  spe^sific 
duty  by  the  ton.  Yarns  were  advanced  for  undervaluation,  al- 
though they  paid  a  specific  duty  of  five  cents  per  pound.  Our  fin- 
ished threads  were  advanced,  although  it  was  well  known  to  every 
merchant  in  the  trade,  that  we  did  not  get  any  advantage  over  the 
trade  or  over  the  Government. 

The  proceedings  were  spun  out  at  an  enormous  length.  Judge 
Blodget,  the  Appraiser-General  of  Philadelphia,  was  called  into 
the  case,  in  the  hope  that  he  might  give  a  decision  adverse  to  the 
firm.  A  merchant  appraiser  Avas  selected,  whose  every  action 
showed  a  contemptible  hostility  to  the  firm  whose  interests  he  was 
supposed  to  protect.  The  evidence  was  again  gone  over  with  the 
utmost  care ;  every  point  which  could  possibly  be  raised  was  raised  ; 
every  charge  which  it  was  possible  to  invent  was  included  in  the 
charges  against  our  house ;  but  the  result  reached  after  months  of 
delay  was  that  the  officials  w^ere  not  able  to  sustain  any  of  the  false 
positions  which  they  had  taken.  But  during  this  long  series  of 
months  our  mills  were  idle,  more  or  less,  our  working  people  were 
thrown  out  of  employment,  our  trade  was  interfered  with,  and  our 
customers  were  obliged  to  look  elsewhere  for  regularity  in  supplies. 
Any  amount  of  security,  in  money  or  otherwise,  to  answer  the  re- 
sult of  the  investigation,  was  repeatedly  oflered,  in  order  that  our 
property  might  be  released  and  our  mills  enabled  to  run,  but  with- 
out effect.  Our  firm  in  Ireland  decided  that  it  was  time  for  them 
to  consider  the  safety  of  a  large  amount  of  capital  invested  in  a 
country  where  such  proceedings  could  be  permitted,  and  concluded, 
as  a  matter  of  prudence,  not  to  go  on  with  the  large  manufactory 
which  had  been  begun,  and  turned  in  disgust  from  the  development 
of  the  linen  thread  business  as  a  manufacturing  interest  in  this 
country.  Our  machinery  was  taken  out  of  our  works  in  Paterson 
and  reshipped  to  Ireland. 

I  spent  weary  months  in  efforts  to  press  a  settlement,  demanding 
justice  and  that  only.  I  made  repeated  applications  to  various  de- 
partments— to  those  under  Collector  Arthuk,  Col.  Darling,  F.  E. 
Howe  and  others,  and  came  in  contact  with  a  great  number  of 
officials.  I  sought  relief  by  all  legitimate  means.  I  went  to  Wash- 
ington and  laid  the  case  before  Secretary  Boutwell,  but  only  got 


from  liini  the  empty  assurance,  that  if  the  facts  were  as  I  stated 
immediate  action  should  be  taken  in  my  case.     No  measures  were 
taken  to  push  forward  the  matter.     When  the  thieves  who  were 
trying  to  phmder  me  thought  I  was  sufficiently  embarrassed  by 
their  schemes,  they  tried  to  get  me  to  compromise.     At  first  they 
said  they  would  take  $250,000.     Afterward  the  sum  was  rapidly 
reduced,  till  at  length  I  was  assured  that  I  could  settle  it  for  $500. 
My  reply  to  them  always  was  that  they  might  be  able  to  drive  me 
out  of  business  and  ruin  me,  but  that  they  would  never  wring  out 
of  me  one  cent  as  an  acknowledgment  of  guilt  on  the  part  of  our 
house.     I  would  die  first.     And  I  never  have  paid  a  cent.     The 
Philadelphia  General  Appraiser  decided  in  our  favor.     The  mer- 
chants' appraiser,  selected  by  our  enemies,  gave  in  a  statement  so 
much  at  variance  with  the  facts,  and  so  grossly  contrary  to  all  the 
evidence,  that  the  Collector  decided  with  Judge  Blodget  that  we 
were  innocent  and  our  invoices  were  correct.     But  this  was  not  till 
after  our  mills  had  been  interrupted  during  fourteen  months,  our 
operatives  scattered,  our  assortment  of  goods  broken  up,  our  cus- 
tomers discouraged  and  many  turned  away,  and  an  amount  of  injury 
done  to  our  business  which  is  simply  incalculable.     Besides,  there 
was  the  terrible  anxiety,  the  injury  to  our  feelings,  and  the  efibrts 
to  damage  our  reputation,  which  fell  upon  the  members  of  the  house. 
There  was  great  injury  to  the  prosperity  of  Paterson,  and  to  the 
country  too,  from  the  action  of  these  thieving  officials.     Our  house 
would  have  invested  $500,000  in  the  new  works  at  Paterson,  and 
built  up  a  new  industry,  which  in  time  would  have  become  very 
extensive  and  exceedingly  important. 

There  was  not  the  slightest  excuse  for  the  terrible  and  outrageous 
delay  and  the  multiplied  embarrassments  in  our  case,  for  we  gave 
the  officials  every  facility  for  examination  into  our  business.  We 
submitted  to  them  every  book  and  paper  which  they  desired  to  see, 
without  obliging  them  to  get  out  a  warrant  for  them.  We  invited 
the  officials  to  visit  our  works  at  Paterson,  and  Col.  Alexander 
with  a  Mr.  Brush  spent  the  day  there.  He  was  shown  every  detail 
of  the  business,  was  given  every  means  to  get  information,  and 
allowed  to  question  our  employes  as  much  as  he  saw  fit.  It  was 
not,  however,  till  this  year  that  we  received  official  information  that 
our  invoices  had  been  liquidated.  The  appraiser  intentionally  kept 
back  our  papers. 

In  conclusion,  Mr.  Barbour  said  that  the  outrageous  system  which 
rendered  possible  such  wrongs  as  his  house  had  suffiLjred  would  ruin 
the  importing  trade  of  the  country  if  continued.     He  had  become 


10 

so  disgusted  with  a  country  which  permitted  such  abuses  that  he 
would  have  left  it,  giving  up  his  interests  here,  if  it  had  not  been 
for  family  ties.  If  such  abuses  go  on,  importers  could  not  keep 
books  here.  They  would  be  obliged  to  have  their  warehouses 
and  accounts  on  the  other  side,  and  only  keep  offices  here  where 
sales  could  be  arranged.  In  blaming  the  officials  for  the  treatment 
his  house  had  received,  he  desired  to  exonerate  the  Collector  and 
Deputy  Collector,  who  had  seemed  at  all  times  anxious  to  enable 
his  house  to  recover  their  property,  and  had  appeared  ready  to  fur- 
nish all  the  facilities  in  their  power  to  that  end.  They  declared, 
however,  that  in  that  matter  their  action  was  entirely  controlled  by 
Howe's  bureau,  and  they  could  do  nothing  to  restore  the  property 
till  the  labors  of  that  bureau  were  closed. 


MERCHANTS  BANISHED  BY  GOYERNMENT  SPIES. 

ADDRESS  OF  MR.  THOMAS  BARBOUR,  AT  SPECIAL  MEETING  OF  CHAMBER 
OP  COMMERCE  OF  THE  STATE  OF  NEW- YORK,  AT  STEINWAY  HALL, 
25th  march,  1874. 

(Reprinted  from  the  THbune  of  Marcli  26.) 

Mr.  President  and  Gentlemen  :  I  am  glad  to  see  among  this 
large  audience  of  importers  and  merchants  many  well  known  faces 
as  friends  of  our  firm.  I  am  glad  to  have  an  opportunity  of  meeting 
them  to-night  to  explain  the  reason  which,  for  many  a  long  month,  I 
was  only  able  to  give  to  their  buyers  that  came  into  our  warehouse, 
the  reason  why  we  couldn't  deliver  our  merchandise  to  them  with 
that  same  regularity  and  promptness  with  which  we  had  done  for  20 
years  before.  [Applause.]  I  need  hardly  give  you,  gentlemen,  the 
story  over  again — the  long  list  of  wrongs  and  oppressions  and  out- 
rages which  our  firm  and  our  manufacturing  interests  have  suffered 
at  the  hands  of  these  shielded  harpies  of  the  revenue  law.  [Ap- 
plause.] That  story,  gentlemen,  we  have  been  induced  during  the 
last  week  to  place  well  before  the  public.  I  have  been  asked  by 
many  friends  and  acquaintances  if  all  that  long  statement  (pub- 
lished in  the  Tribune  of  March  23)  was  true  ;  and  I  say  here  before 
you  to-night  in  public,  that  every  syllable  of  that  statement  is  as 
true  as  Gospel.  [Applause.]  And,  moreover,  we  are  in  a  position 
to  prove  it.     We  had  the  misfortune,  gentlemen,  induced  by  the 


11 

liberal  laws  of  this  country  in  taking  off  the  duty  on  flax  machinery^ 
to  come  over  here  with  our  capital  and  our  machinery  and  our 
skilled  operatives,  and  we  made  very  large  investments  in  the  City 
of  Paterson  ;  ^vc  erected  workers'  houses  ;  we  erected  factories  and 
we  started  our  machinery,  and  for  seven  years  we  went  on  un- 
interruptedly and  developed  what  we  considered  a  fair,  legitimate 
business  enterprise.  And  last  year  I  think  our  local  taxes  which 
we  were  called  upon  to  pay  in  Paterson  amounted  to  eight  thousand 
seven  hundred  and  odd  dollars.  I  have  already  stated  the  Avay  our 
troubles  commenced  in  the  Revenue  Department.  We  did  not  wait, 
gentlemen,  to  have  a  warrant  issued  for  the  seizure  of  our  books — 
we  carried  them  down  into  the  Revenue  Department.  [Applause.] 
We  asked  the  officials  to  go  carefully  through  them  and  see  if  in 
all  those  long  entries  they  could  detect  any  error,  clerical  or  other- 
wise, on  which  to  attach  this  charge  of  fraud.  We  asked  these 
officials  up  to  our  works  ;  showed  them  through  every  department ; 
invited  them  to  inspect  the  different  ramifications  of  our  business, 
and  see  if  they  could  substantiate  any  charges  which  they  might 
make  against  our  firm.  But  it  was  of  no  avail.  I  have  heard  to- 
night gentlemen  recommend  merchants  to  show  what  is  known  as 
backbone  and  pluck ;  but  I  question,  gentlemen,  after  fourteen  long 
months  experience  with  these  revenue  officers,  these  Custom-House 
officials  and  these  appraisers,  if  I  would  recommend  any  importing 
firm  to  show  either  backbone  or  pluck.  [Applause.]  I  think  the 
best  thing  that  any  firm  can  do  when  these  polite  individuals  walk 
into  the  store  is  to  hand  them  over  your  cash-box  and  tell  them  to 
help  themselves.  [Cheers.]  It  is  much  cheaper  for  any  business  firm 
to  pursue  this  course  than  to  stand  up  and  remonstrate  against  the 
proceeding. 

There  are  many  large  firms  whose  names  I  could  repeat  to  you 
here,  and  which  are  quite  familiar  to  you,  that  within  the  last  two 
years  have  ceased  to  keep  a  stock  of  goods  in  this  country.  They 
have  transferred  their  books  and  their  papers  to  Great  Britain,  and 
in  place-  of  occupying  stores  and  paying  rents  and  keeping  up  a 
staff  of  clerks  and  a  stock  of  goods  here,  they  simply  represent  the 
business  by  samples,  and  deliver  their  goods  direct  from  the  ship 
to  their  customers.  By  this  means  they  avoid  the  risk  of  their 
property  being  seized  and  confiscated  on  some  imaginary  charge  or 
clerical  error.  I  have  had  some  twenty  years  experience  in  this  city 
as  an  importer,  and  I  think  the  merchants  present  will  all  agree 
with  me  when  I  say,  that  in  an  importing  business  there  is  of  neces- 
sity a  great  number  of  details.     We  frequently  receive  our  invoices 


12 

"by  the  same  steamer  which  brings  our  goods.  There  is  generally 
great  hurry  in  making  up  the  entry,  and  it  is  quite  impossible  for 
an  importer  to  be  responsible  or  to  examine  every  little  detail  that 
goes  into  the  manifold  figures  and  calculations  in  making  up  an 
entry  of  merchandise.  [Applause.]  You  can  see,  gentlemen,  in  the 
employment  of  a  number  of  clerks  what  an  immense  temptation  it- 
is  to  a  young  man  when  he  is  offered  a  large  bribe  as  an  informer- 
to  get  up  a  special,  little  irregularity,  or  clerical  error,  so  as  to  divide 
the  spoils  filched  from  the  importer  who  employs  him  with  these 
revenue  oflicers.     [Applause.] 

I  do  not  know  that  I  need  say  any  thing  to  you  about  the  law. 
That  matter  has  been  most  clearly  laid  down  to  you  by  my  friend  on 
the  right,  Mr.  Ciioate  ;  but  there  is  one  law  that  I  understand  as  well 
as  any  lawyer,  and  that  is  the  law  of  right  and  wrong — [cheers] — 
and  I  think  if  a  law  exists  to-day  which  permits  these  revenue  officers 
to  march  into  our  counting  houses  and  take  away  our  books  and 
papers,  the  sooner  we  merchants  turn  around  and  stare  such  a  law 
square  in  the  face  the  better.  [Applause.]  The  sooner  we  come 
and  stand  shoulder  to  shoulder  in  the  defence  of  our  rights  the 
sooner  will  we  be  safe.  [Applause.]  I  should  like  to  know  under 
the  present  system  what  safety  a  banker  rn  London,  or  in  Paris,  or 
in  Frankfort,  can  have  in  making  advances  on  a  shipment  of  goods 
to  this  country — [cheers] — when  the  whole  shipment  on  which  he 
makes  these  advances  may  be  seized  and  confiscated  for  some  little 
technical  or  clerical  error.  With  our  experience  in  establishing  a 
manufacturing  interest  here,  I  should  like  to  ask  what  inducements 
are  held  out  to  foreign  capitalists  to  invest  in  developing  the 
industries  of  this  country.  [Applause.]  There  is  one  thing  that 
merchants  honor  and  prize  even  above  their  money,  their  books, 
their  papers  and  their  property.  I  allude,  gentlemen,  to  their  good 
name  and  reputation.  [Long  continued  applause.]  From  the  first 
moment  that  a  charge  of  defrauding  the  United  States  is  made 
against  a  respectable  firm,  the  rumor  seems  to  pervade  the  whole 
atmosphere.  It  is  sent  from  city  to  city  by  the  rivals  of  the  firm  so 
charged,  and  any  little  links  that  are  wanting  in  the  chain  are  very 
soon  supplied  by  these  same  gentlemen  who  are  so  anxious  to  for- 
ward the  news.  [Applause.]  Thus  the  reputation  of  a  lifetime^ 
that  legacy  which  a  merchant  may  wish  to  hand  down  to  posterity^ 
is  torn  away  from  him  by  a  Government  that  he  may  have  con- 
tributed much  to  uphold  and  sustain.     [Cheers.] 


THIS  BOOK  IS  DUE  ON  THE  T.AST  DATE 
STA3MPED  BELOW 

AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED   FOR   FAILURE  TO  RETURN 
THIS   BOOK  ON   THE  DATE  DUE.   THE  PENALTY 
WILL  INCREASE  TO  50  CENTS  ON  THE  FOURTH 
DAY    AND    TO    $1.00    ON    THE    SEVENTH     DAY 
OVERDUE. 

^^'^  S.0  ,5-^ 

VlMar65W8 

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Pamphlet 

Binder 

Gaylord  Bros. 

Makers 
Stockton,  Calif 

PAT  JAN  21    1908 


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